[bodyfour]

Look back 30-40 years: * Places like the Lower East Side of Manhattan were magnets for broke artists because they were dirt cheap places to live. * San Francisco neighborhoods like SOMA were similarly inexpensive. A few people with meager incomes could go in together and rent a warehouse to live in. * London had numerous squats: housing stock so unvalued that it wasn't worth stopping people just moving in for free. Think about property values in those places today.

In the past 60 years we've witnessed a remarkable cycle. First you had the "white flight" to the suburbs starting in the late 1950s or so. By 1980 the general consensus seemed to be that central cities were doomed forever to poverty. Now the trend is reversed and people want to pour back in. However, the regional population is much larger than when this cycle started so central housing has become a scarce resource.

The article is mostly about forces particular to the London market though. It is amazing how high property values have gone there. I live in San Francisco so I think I'm fairly accustomed to high prices, but visiting London and seeing mews houses going for £3m still blew my mind. Another peculiarity of the UK market is that a lot of property trading are just leaseholds, so you don't even really own the house after you "buy" it. (There are "freeholds" for sale as well, but that's even more expensive) Lovely city, but it does make you poor.